Halloween Tricks for Flo & Eddie and Treats for SiriusXM
If you have been following the ongoing saga regarding the attempts of pre-1972 (aka "oldies") sound recording owners to collect royalties when those recordings are performed, you will know that some recent key court rulings have been issued near major holidays. For example, New York's highest state court found near Christmastime that those owners had no such right in New York, and the Second Circuit then threw out the case near Valentine's Day.
Now, on the cusp of Halloween, the Florida Supreme Court joined its sister State up north by also refusing to recognize pre-1972 performance rights under Florida law.
The Florida court's ruling comes in a case involving two parties who are no strangers to this fight - Flo & Eddie (two former members of "The Turtles") and SiriusXM (the sole satellite radio company in the country). For those readers who are new to the issue, the fight itself centers on whether groups such as Flo & Eddie are able to collect royalties when their recordings created before February 15, 1972 are performed.
[Why February 15, 1972, you may ask? Because recordings fixed on or after that date are subject to federal law, where the rules of the road are clear: Post-1972 recordings generally may be performed without payment of any royalties - for example, in restaurants, bowling alleys, dance halls, church services, over the radio, etc. The only instance in which performance royalties may be collected is when these recordings are performed via certain types of digital audio transmissions - think webcasting, on-demand streaming companies such as Spotify, and satellite radio (SiriusXM), for example. Pre-1972 recordings, on the other hand, are subject to the varying laws of the 50 States, which may or may not recognize a performance right. This uncertainty under State law has led to a veritable witches' brew of litigation across the country to settle this issue state by state.]
In the fight preceding the most recent Florida decision, New York became the first significant state to rule definitively that it does not recognize a public performance right in those recordings, validating SiriusXM's position. That ruling became the first nail in the coffin of the efforts of record companies and artists to have a pre-72 performance right recognized under state law.
Now, Florida has driven in a second nail.
In a welcome early Halloween treat for SiriusXM - and a trick for Flo & Eddie - the Florida Supreme Court similarly refused to recognize a pre-72 performance right under Florida law. While the case had originally been brought in federal court, the issue landed in the top Florida state court's lap because the Florida Supreme Court generally has the final say in determining matters of Florida law. More to the point, after SiriusXM had won in federal district court, the federal appellate court handling the appeal found that Florida law was not clear on this issue and requested that the Florida Supreme Court resolve the matter (in legal speak, the Eleventh Circuit "certified" the performance rights question to the Florida Supreme Court).
The Florida Supreme Court first traced the belated and narrow creation of a public performance right in post-72 sound recordings under federal law and then observed that:
Flo & Eddie essentially asks this Court to recognize an unworkable common law right in pre-1972 sound recordings that is broader than any right ever previously recognized in any sound recording.
The court found that "[s]uch a decision would have an immediate impact on consumers beyond Florida's borders and would affect numerous stakeholders who are not parties to this suit." It therefore "decline[d] to reach the conclusion that, despite decades of industry lobbying, Congress eventually granted a right in 1972 that was significantly less valuable than the right Flo & Eddie claims has existed all along under the common law in Florida and elsewhere." Instead, it held that recognition of such a right "would be an inherently legislative task."
[Side note: The court also rejected Flo & Eddie's claim that SiriusXM had made infringing back-up or buffer copies as well as Flo & Eddie's other common law claims based on unfair competition, misappropriation, conversion, and civil theft.]
The decision is a resounding victory for SiriusXM and a proverbial Halloween rock for Flo & Eddie, but don't think for a second that that duo has been spooked away from the issue. All eyes are on California now, where that State's highest court is set to decide the same issue in the next few months. Stay tuned for updates!